1. FINANCIAL GUARANTEE
PENNSYLVANIA STATE FINANCIAL GUARANTEE PROGRAM
FOR COMMERCIAL AND MIXED USE REAL ESTATE MORTGAGES

2. Financial Guarantee
 First I want to THANK all those involved in affording
Guardian Advance this opportunity. It is truly an honor
and a privilege to come before this lustrous group of
legislators and be heard. I know you won’t be
disappointed in this presentation.
 So let us begin to try to make some sense of the current
mortgage Mess! We’ve all heard that every cloud has a
silver lining, or that I have a ―Guardian Angel ― when
something terrible happens and we seem to find
something positive in a crisis situation.
 I know that Pennsylvania has found an ―Angel ― in the
Guardian Advance program. The Financial Guarantee
Program for commercial/mixed use Real Estate Loans.
 The program is an economic stimulus and adds stability
to the business climate for business’s seeking to
establish a new or to expand there existing company by
purchasing Real Estate within the Great State of
Pennsylvania!

3. Financial Guarantee
 We are proposing this Financial Guarantee program to
do just that!
 By Targeting Commercial / Mixed-Use Real Estate!
 Please take a moment to note—
 Q:---Why Pennsylvania?
 The Author and Copyright holder is a Native
Pennsylvanian both born and raised in Allentown Pa.
 Therefore, the opportunity for Pennsylvania to be the
kickoff state (seems only natural ) in this soon to be
nationally recognized program.
 This Financial Guarantee Program subscribes to the
theory that simplicity and ease of use for all those who
come in contact with the program.

4. Financial Guarantee
 The Borrower does not need down payment money –
They simply purchase - a Down Payment Financial
Guarantee , at about 3% of the total purchase price of
the property.
 The Lender or Mortgage Company makes no change in
their current lending practices---once the guarantee is
submitted and accepted the lender commits to a 100%
of the property financing.
 The Lender then establishes the repayment of all
principal and interest on the loan for a 100% funding.
 The Financial Guarantee …is the down payment.
 The only time the guarantee is triggered or used ,is in
the case of any default. Should the loan have been
successful and paid down ,below the original guarantee
amount of the down payment, there is no recourse
against the financial guarantee.

5. Financial Guarantee
 It should be noted at this point, according to the Fitch
report ( banking industry ―watch dog‖ reporting service)
less then 1% of theses type loans default on a national
average.
 The stimulus is created, when the borrower does not
strain precious cash reserve ,in acquiring property, this
will allow the ―qualified Borrower‖, that has proven or
has risen to an acceptable level with a lender to get a
commitment from a lender to loan the‖ lions share‖ of
the money. We use the words ―qualified Borrower‖ for
good reason, this program is NOT based on the use of
any adverse selection process, that would reach or allow
those who are unproven or financially suspect ,to gain
access to the program. Rather this program is a ―Reward
Program‖ for business and entrepreneurs who are
succeeding in Pennsylvania by expanding real estate
holdings state wide.

6. Financial Guarantee
 Loan commitments from lenders on commercial and
mixed use property usually have a range that can be
from 50% to 80% of the funds needed to close any real
estate deal. This requires the purchaser and or borrower
to make a large cash outlay for a down payment to
acquire the real estate. This is generally the ―deal
breaker‖ in most cases.
 The Financial Guarantee will cover the difference
between bank commitment and money required to settle
the property. No policy changes for the banking or
lending industry in the use of this Financial Guarantee.
 Keep in mind the lender still holds the larger exposure
in the loan and will suffer the greater loss in the event of
a default.
 A built in safe guard against rubber stamped loans.


7. FINANCIAL GUARANTEE
CONTENTS
 • Marketing
 • Letter of Incorporation & Copyright
 • Competition
 • Operating Procedure
 • Background of Principles
 • Underwriting Guidelines
 • Loan Checklist
 • Release of Credit
 • Application
 • Appraisal
 • Summary Sheet
 • The Bond & Agreement of Indemnity
 • Matrix for Lending Institutions
 • Fitch Ratings - loan default rates
 • Projections
 • Letters of Intent from Lending Institution

8. FINANCIAL GUARANTEE
 New Century Commercial
 RE: Financial Guarantees for "Mixed-Use Real Estate"
Markets
 Dear Mortgage Administrator:
 Enclosed please find our proposal to introduce to
lending institutions, Financial Guarantees, for mixed use
real estate.
 We are committed to serving both the mortgage
industry as well as the insurance industry. Our theory
will bring the financial and insurance industry (financial
guarantee / surety) together, and formulate a program
which will stimulate the economy with a normalized line
of lending in the mixed use market of the real estate
industry.
 I hope you will share in this vision and join us on the
cutting edge of the exciting revelation in mixed use
mortgages.
 Sincerely,
 Glenn F. Miller, CEO , Copyright Holder
 Michael Sabler, COO
 Barbara Polinice, Program Administrator

9. FINANCIAL GUARANTEE
Basic Questions
 1. How does the Financial Guarantee Program work?
 2. What is the purpose of the Primary (Underwriting)
 Insurer?
 3. What benefit does Primary (Underwriting) receive?
 4. What benefit does Copyright Holder receive?
 5. What benefit does Secondary (Re-Insurer) receive ?
 6. What benefit does Lending Institute receive?
 7. What benefit does Borrowers (Mortgagee) receive ?

10. FINANCIAL GUARANTEE
ANSWERS
 1. To define the program , it is a down payment assurance
policy that is acceptable and recognizable to lending
institutions that are making a commitment to underwrite
 a mortgage (for commercial /mixed use property).
 The Lender uses their own lending practices to underwrite
the loans based on existing LTV (loan to value)
percentages.
 General practice range for lenders is a COMMITMENT of
(between 60 to 80 percent of the LTV).
 This program allows the borrower (if required to pay
difference of committed percentage down payment
between 20 to 40 percent. ie. Equity to meet lending
requirements).
 Our program will provide a policy that covers (equity) down
 payment for the borrower.

11. FINANCIAL GUARANTEE
 The lending institutions underwrites the loan then uses
our program as an ―overlay‖ to provide the insurance of
a down payment.
 A premium is paid for this "policy or bond", which
"guarantees― the down payment only.
 Additionally, the policy provides a "safe guard "in
writing this premium while the guarantee/policy bond
only provides assurance of the down payment.
 The major lending risk, if a default occurs ,lies with the
 originating lender.
 Automatically becoming a "safe guard" against "Rubber
Stamp Loans".

12. FINANCIAL GUARANTEE
 2. Primary Insurer (policy generator) produces a written
 policy/bond guaranteeing down payment for a premium
by doing so, assumes the risk of the required difference
between the lender commitment and the LTV.
 The result is 100 percent of loan needed for 10 percent
of the premium.
 3. Primary Insurer policy producer or guarantee bond in
 exchange for policy or bond ,the insurer will receive a
 percentage of the premium. An escrow pool or reserve
will be generated out of each premium paid to cover
potential default.
 Using the theory, of the larger numbers apply and
industry actuarial, primary insurer assumes a zero risk
exposure for premium participation.

13. FINANCIAL GUARANTEE
 4. Copyright Holder, will participate on a percentage
basis of all premiums written (suggested percentage -40
percent of the premium).
 5. The secondary Re-Insurer or Guarantor will receive a
40 percent premium for a 100 percent financial default
risk.
 The above figures and percentages are negotiable.

14. FINANCIAL GUARANTEE
 6. Lending Institutions do not participate in any
premium generated . They will have the ability to
receive payment on a 100 percent of the LTV.
 Generally, mortgage properties of commercial mixed use
have a 60 to 80 percent loan commitment from lender,
as the norm. The policy /bond , financial guarantee
permits lenders to collect a 100 percent of the loan with
only a 60 to 80 percent risk

15. FINANCIAL GUARANTEE
 7. The largest benefactor is the borrower / investor ,
they will have the ability to borrow on the full LTV of the
purchase / mortgage by purchasing a financial
guarantee to cover the down payment.
 The cost of this benefit is approximately 3 percent of the
 purchase price plus closing costs. This assures lenders of
a down payment on a mortgage.
 NOTE:
 Additional benefit , the borrower does not drain cash
from portfolio, allowing the needed working capital to
continue normal business functions, without draining
their financial recourses.

16. FINANCIAL GUARANTEE
Marketing
 Upon surety approval the copyright holder and or its agency,
 have a random marketing plan to be implemented through
 current lending networks. A random introduction to the
program has been implemented with results showing nearly
100 percent of the lenders responding positively for additional
information concerning this program.
 The respondents will be referred to a website giving summary
 and examples of use. The website will also contain MGA
 contact information and support document request
information.
 Support documents will be sent electronically and can be
printed from the website to eliminate shipping expenses as
well as printing expenses.
 Additional marketing has been done through lending networks.
 All parties polled upon presentation and full explanation show
 Eagerness in the release of our "down payment guarantee"
 program.

17. FINANCIAL GUARANTEE
Competition
 Although we see no true competition for this program,
there is always the potential piracy or modifications.
 Traditional avenues for lending whether conventional,
SBA, or private lending are complicated and confusing.
 The primary purpose of the Guardian Advance ,Financial
Guarantee Program is to simplify lending, which will
allow all lenders (with current lending policy changes)
particitipating to compete for borrowers business on a
level plane.

18. FINANCIAL GUARANTEE
Operating Procedures
 This will be determined by the surety and the Managing
General Agent.
 (Recommended -Fleetwood Agency)

19. Financial Guarantee
In conclusion, again we Thank all those who had a hand or showed
interest in this presentation. Most importantly, what you have just heard
places NO Extraordinary Financial burdens on any State funding agency.
We are seeking a $5million Grant to perfect this program for Pennsylvania.
This will stimulate billions of dollars in real estate transactions state wide.
Having an unprecedented effect on the economic well being for the state
of Pennsylvania. Including but not limited to property, school taxes,
mortgage financing, appraisers, title companies, construction inspections,
municipalities fees, permits and legal fees. With a minimal , almost non
existent default rate. The Mortgage Industry is prepared for this program
and waiting to begin.
Let’s make it happen together.
Please review all included documentation and suggested samples in your
handouts.
Thank you for time and consideration!

20. FINANCIAL GUARANTEE